Target Healthcare REIT has announced that it has exchanged contracts to acquire a 12-bed specialist care home in Bricket Wood, St Albans for approximately £2.3m (including acquisition costs). The transaction is expected to complete after the expiration of a “planning judicial review period” in March. Following this, Target is to acquire the care home, which will then be leased back to a specialist care provider, HSN Care, for a period of 50 years. The company says that the transaction represents a net initial yield in excess of 7% and the rent payable under the lease is subject to upwards-only annual uplifts in line with the retail prices index, subject to a cap and collar. As part of the agreed terms, Target is to provide a short-term loan facility to HSN in order to fund the land acquisition and refurbishment of the property with any delays in timing or cost overruns remaining the responsibility of HSN. The loan facility attracts an accrued coupon of 8.85% per annum and the loan capital and accrued interest will be repayable from the consideration proceeds once the acquisition completes.
Target say that the care home, which is a former NHS clinic, has been re-designed and extensively refurbished, and when opened will provide high quality residential care and supported living accommodation. They also say that they are working on a number of opportunities and hope to announce further acquisitions in the coming months.
Target Healthcare REIT to acquire care home in Bricket Wood, St Albans : THRL